Beginning in 2026, taxpayers who take the standard deduction have a new opportunity to receive a tax benefit for charitable giving.
H.R. 1, also known as the One Big Beautiful Bill Act (OBBBA), permanently reinstated a charitable contribution deduction for taxpayers who do not itemize their deductions. Beginning in 2026, single filers may deduct up to $1,000 of qualifying charitable contributions, and married couples filing jointly may deduct up to $2,000. This deduction is available in addition to the standard deduction.
What Contributions Qualify?
The new deduction is limited to cash contributions made directly to qualified charitable organizations. Contributions of appreciated securities or other property do not qualify. Contributions to donor-advised funds, supporting organizations, private non-operating foundations, and charitable remainder trusts are also excluded from this deduction. Standard recordkeeping rules still apply: keep a bank record or receipt for each gift, and obtain a written acknowledgment from the charity for any single gift of $250 or more.
Why Does This Matter?
In recent years, many taxpayers have taken the standard deduction rather than itemizing. As a result, their charitable contributions may not have provided an additional federal income tax deduction. This new rule provides a tax benefit for at least a portion of charitable giving without requiring the taxpayer to itemize.
Other Strategies to Consider
For individuals and families who give more substantially to charity or who itemize their deductions, other strategies such as donating appreciated securities, using a donor-advised fund, or making Qualified Charitable Distributions (QCDs) from an IRA may provide greater tax benefits. For those age 70½ or older, QCDs will generally be the most tax-efficient way to give since QCDs are excluded from income entirely, lowering your AGI while simultaneously satisfying your Required Minimum Distribution.
As with any charitable giving strategy, tax considerations should be evaluated alongside your overall financial and philanthropic goals. At SFG, we recommend coordinating charitable giving decisions with your wealth manager and tax advisor to determine the strategy that is most appropriate for your individual situation.